Costco Raises Its Minimum Hourly Wage to $16

Costco Wholesale will increase its minimum wage by $1 to $16 starting next week.

CEO Craig Jelinek made the announcement during a Senate Budget Committee hearing on pay at large retail and fast-food employers.

Jelinek added that Costco's hourly workers in the U.S. are paid on average above $25.

Costco employs about 180,000 U.S. workers.

“This isn’t altruism,” Jelinek said. “It helps in the long run by minimizing turnover, maximizing employee productivity, commitment and loyalty.” In the U.S., employees average more than 9 years with the company, he said.

Jelinek also said the company offers regular raises, bonuses and health care benefits. About 89% of workers are currently eligible for health care coverage, he said.

Last week Walmart announced that the average wage for its U.S. hourly workforce will now be at least $15.25 per hour.

But Kroger-affiliated food retail stores are closing down because of what the company calls the pressure of pay mandates.

Quality Food Centers (QFC) will close two underperforming stores in Seattle, a decision accelerated by a new Seattle City Council mandate that requires certain employers to provide extra pay for some, but not all, city front-line workers, the food retailer said.

The city recently passed a $4-per-hour pandemic pay mandate that applies to employees of grocery operators with more than 500 workers worldwide, and for locations of at least 100,000 square feet. 

The two affected store locations will remain open and operational for 60 days — through April 24 — until the closure process is complete. The store locations are 416 15th Ave E, Seattle, and 8400 35th Ave NE, Seattle.

Pandemic pay mandates passed by local governments on the West Coast have led to lawsuits and other Kroger store closings. Earlier in February it blamed mandated pandemic hazard pay for the upcoming closings of two supermarkets it owns in Long Beach, California.

Cincinnati-based Kroger employs nearly half a million associates who serve 9 million-plus customers daily through a seamless digital shopping experience and 2,800 retail food stores under a variety of banner names. The company is No. 3 on The PG 100, Progressive Grocer’s 2020 list of the top food and consumables retailers in North America.